In surprise, Baltimore exempt from controversial Section 8 program to increase mobility

The Baltimore region would be exempt from a federal housing voucher reform designed to help low-income families move out of high-poverty areas.

The plan is meant to allow holders of housing choice vouchers — commonly known as Section 8 vouchers — to receive higher rental reimbursements if they use them for housing in low-poverty ZIP codes, while reducing payments in high-poverty areas.

The controversial proposal comes amid concerns that earlier federal policies perpetuated economic divisions or prompted landlords to inflate rents even as research showed the powerful benefits conveyed to children who grow up in stable, safe neighborhoods.

Issued by the U.S. Department of Housing and Urban Development, the draft rule would set federal rental subsidies by ZIP code in 31 metro areas, including New York, Washington and Philadelphia, replacing the broader metro-wide approach used now.

"It's clear that our current approach to supporting more options isn't working in many areas," said Katherine M. O'Regan, HUD's assistant secretary for policy development and research. "What we propose … will offer real choice to voucher-assisted families."

Baltimore is exempt because a voucher holder in the region is only 44 percent more likely to live in a low-income area than a general renter — less than a 55 percent threshhold established by HUD.

But the formula makes places without much difference between voucher holders and other renters appear to have less of a problem — even if both groups likely live in high-poverty zones and would benefit from assistance.

"It may be because Baltimore renters are so, so poor and live in such disadvantaged areas that there is less of a difference," said Eva Rosen, a postdoctoral fellow at the Johns Hopkins University's Poverty & Inequality Research Lab who has studied the voucher program in Baltimore and other cities.

Rosen, who cautioned that she had not seen HUD's data, praised the reform and said it was "problematic" that it's not coming to Baltimore, where about a third of renters earn less than $25,000 a year, according to census data.

But the HUD proposal has met some resistance since it was first outlined last year.

Some suburban Baltimore politicians said they were concerned about its effect on county neighborhoods, while landlords and Baltimore housing officials said they feared it could lead to fewer vouchers being distributed and reimbursement cuts that would deter investment in the city's low-income neighborhoods.

Baltimore Housing Commissioner Paul Graziano said he remains concerned that the program will restrict choices for poor families without leading them to better neighborhoods.

In comments submitted to HUD last year, he cited the Housing Authority of Baltimore City's experience relocating families after closing the Madison Park North Apartments. Just 11 of 194 families opted to move out of a "non-opportunity" ZIP code, despite receiving $3,000 in relocation assistance and and counseling.

"Whether we're included or not — I'm certainly relieved that we're not — it doesn't get at the fundamental issue, [which is] that as a matter of public policy, it seems to be a huge gamble," he said.

HUD said the more fine-tuned approach is focused on increasing access to better neighborhoods and reducing the chance that HUD subsidies lead landlords to charge higher rents.

"We're attempting to tackle a difficult and vexing problem in particular areas where concentration is most severe and where this proposed new approach has the greatest likelihood to offer voucher families real choices to move to higher-opportunity neighborhoods," HUD spokesman Brian Sullivan said, adding that the rule remains in comment period and could be revised.

The position of the Baltimore region, which includes Columbia and Towson, is unusual.

It is one of just six U.S. metro areas, including Milwaukee and Albuquerque, N.M., that would be exempt from the new ZIP code plan but currently participate in an earlier program designed to address the same problem of voucher holders concentrating in high-poverty areas.

That program, which authorized higher-than-usual subsidies where many voucher holders lived in low-income neighborhoods, would be phased out under the rule, raising the likelihood of reduced voucher payments in Baltimore.

Housing authorities are permitted to reapply for the exception, but must show they are making progress toward reducing concentrations of poverty. Baltimore retained its higher-than-usual subsidies last year after the congressional delegation intervened.

Jack BeVier, a partner at The Dominion Group, which owns about 550 rental properties in Baltimore City and leases about 450 to voucher holders, said he is concerned about the possibility that HUD will peg the Baltimore region's housing subsidies to a lower rent limit. That could lead landlords to stop accepting tenants who use the voucher program, he said.

Graziano called that possibility "antithetical to the notion of increasing choices and expanding mobility."

Clifton Martin, CEO of the Housing Commission of Anne Arundel County, said the possibility that the region would move to the lower threshold would be "catastrophic" for his jurisdiction, leading to fewer options and forcing families to pay more for rent or look for a lower-cost area.

But he said applying the ZIP code-level approach to the region could work — if the higher threshold were maintained.

"It has been clear that HUD has been very interested in the [ZIP code] concept for a number of years, and as a concept where the rent levels are set acceptably, could work and make great sense," he said.